State Preemption of Local Equitable Housing Policies

Introduction

A serious and worsening housing crisis and an unprecedented public health emergency have prompted some cities and other local governments to advance housing policies that promote affordability, equity and opportunity.  Many state governments however continue to block these policies from taking effect.

The map focuses on four of these policies: protections against source-of-income discrimination, the regulation of short-term rentals, inclusionary housing programs, and rent regulation. The rising tide of state preemption detailed in this tool makes it clear that local initiatives and innovation are being banned when and where the need for affordable, inclusive housing policies are most needed.

Mapping State Preemption of Local Equitable Housing Policies

This mapping tool developed by the Local Solutions Support Center brings together research from Grounded Solutions Network, PowerSwitch Action, the Poverty & Race Research Action Council (PRRAC), the National Fair Housing Alliance, and the Urban Law Center, to document state preemption of inclusive and equitable local housing policies.

BACKGROUND

The United States is in the midst of a housing crisis that touches every corner of the nation, with the BIPOC and low-income Americans who make up the majority of renters suffering the most. 

According to a recent compilation of Census data, 58% of Black American households and 53% of Hispanic households rent their homes. Less than a third (31%) of white households rent. A separate Census dataset from 2018 shows that Black households make up 20.2% of all renters in America compared with 8.1% of all homeowners.  

Local governments have taken the lead in addressing the nation’s housing crisis through policy reforms that protect tenants or increases access to affordable housing. But, as the map shows, this progress is increasingly imperiled by state preemption.

More About Each Type of Housing Preemption Law

To understand the impact of state interference, it helps to have a basic understanding of some of the most prominent examples of local efforts to advance equitable and inclusive housing policies.

SOURCE-OF-INCOME NONDISCRIMINATION

Local laws that protect families from discrimination based on their source of income can make it easier for families who receive federal assistance to find quality, stable affordable housing in communities that meet their needs. Federal housing vouchers allow participants to move anywhere they find suitable housing – theoretically expanding their options beyond the historic, enduring concentration of subsidized housing. In practice, housing choice remains curtailed by landlord bias against voucher holders. In many areas, source-of-income (SOI) discrimination has a disproportionately severe effect on groups already likely to face discrimination based on characteristics protected by the Fair Housing Act, such as race and disability, reinforcing patterns of residential segregation. Landlord discrimination against voucher holders can also deepen the burdens—economic and otherwise—that vulnerable households face when seeking homes, with accounts of discrimination further discouraging tenants.

SOI protections are currently enacted in twelve states, the District of Columbia and numerous cities, while three states provide incentives to promote the acceptance of housing choice vouchers. These protections are promising and show an evolving recognition of the benefits of SOI laws, although the benefits of SOI laws are most fully achieved where there are strong complementary policies to overcome informational hurdles to housing access, including housing mobility counseling, landlord outreach, and affirmative marketing.

States with this preemption: Indiana, Iowa, and Texas

INCLUSIONARY ZONING AND RELATED HOUSING PROGRAMS

As the affordable housing crisis has grown more severe, cities and counties are using their role as land use regulators to ensure that residential development includes affordable units for low-income and working families. These inclusionary housing programs tap the economic gains from rising real estate values to create affordable housing for lower income families. An inclusionary housing program might require developers to sell or rent 10 to 30 percent of new residential units to lower-income residents.

Many, but not all, programs partially offset the cost of providing affordable units by offering developers incentives such as tax abatements, parking reductions, or the right to build at higher densities. Most programs recognize that it’s not always feasible to include affordable on-site units within market-rate projects. In some cases, developers can choose among alternatives, such as payment of an in-lieu fee or provision of affordable off-site units in another project.

States with this preemption: Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Montana, Tennessee, Texas, Virginia, Wisconsin

REGULATION OF SHORT-TERM RENTALS

Launched in 2007 as airbedandbreakfast.com, Airbnb today has more than 3,000,000 listings worldwide. Airbnb and similar short-term rental platforms like HomeAway, VRBO, and others provide on-line tools to allow people to rent space in their homes, although they also facilitate the rental of units in more traditional vacation properties without actual home sharing.

The rapid growth of these short-term rental platforms has raised significant concerns about their impact on housing affordability and availability. Local regulators have sought to mitigate these concerns by restricting the location or concentration of short-term rentals, or prohibiting them altogether, regulating the minimum length of stay, limiting short-term rentals to primary residences, requiring licenses for short-term rentals, and other regulatory strategies.

States with this preemption: Arizona, Florida, Idaho, Iowa, Indiana, New Hampshire, North Carolina, Tennessee, Wisconsin, Utah

Rent regulations

Regulations that cap the rate at which owners can increase rents over a period of time can help protect tenants from de facto (economic) eviction. These policies can include an annual or multi-year limit on the percentage increase in rents or it can be tied to an indicator like the consumer price index (CPI). Typically rent regulation allows rents to exceed the maximum rate of increase for major repairs, rising operating costs, or cases of proven hardship. Without these allowances, rent regulation may prevent landlords from making needed investments to keep properties habitable and up to code, particularly in weaker markets. These laws typically allow landlords to set the initial rent at any level when marketing a vacant unit or signing an initial lease. Limited increases then apply to the subsequent duration of tenancy. This policy feature is termed “vacancy decontrol.” Rent regulation pairs well with just-cause eviction protections, so that landlords cannot arbitrarily evict tenants to avoid rent control restrictions.

States with this preemption: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Oklahoma, Oregon, New Mexico, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, Wisconsin

CONCLUSION

As the mapping tool we are providing makes clear, local policies designed to foster communities of opportunity, equity, and inclusion are being compromised by preemption—state interference that is perpetuating inequality at a time of genuine crisis in affordable housing.

Table View by State

Alabama:

Rent Regulation Preemption – Ala. Code § 11-80-8.1 (1993)

ARIZONA:

Inclusionary Zoning Preemption –

Short-Term Rental Preemption –

Rent Regulation Preemption – Ariz. Rev. Stat. Ann § 33-1329 (1980)

Arkansas:

Rent Regulation Preemption –

California:

Rent Regulation Preemption – Cal. Civ. Code § 1954.50-53 (1995)

Colorado:

Inclusionary Zoning Preemption – Town of Telluride v. Lot Thirty-Four Venture 3 P.3d 3o (CO 2000)

Rent Regulation Preemption – Colo. Rev. Stat. § 38-12-301 (2010)

Florida:

Short-Term Rental Preemption – Fla. Stat. § 509.032 (7)(b)

Rent Regulation Preemption – Fla. Stat. § 166.043 (2018)

Georgia:

Rent Regulation Preemption – Ga. Code Ann. § 44-7-19 (2010)

Idaho:

Inclusionary Zoning Preemption – "At least some form of local inclusionary housing policies (typically mandatory policies) are clearly prohibited for both ownership and rental housing, either by statute or by court decision.)” because an Idaho court struck down a local inclusionary housing ordinance as an unconstitutional tax." (Mt. Cent. Bd. of Realtors v. City of McCall)

Short-Term Rental Preemption – Idaho Code Ann. § 67-6539 (2017)

Rent Regulation Preemption – Idaho Code Ann. § 55-307 (1990)

Illinois:

Rent Regulation Preemption – 50 ILL. COMP. STAT. 825/1 (1997)

Indiana:

Source-of-Income Nondiscrimination Preemption – Ind. Code § 36-1-3-8.5

Inclusionary Zoning Preemption – Ind. Code § 32-31-1-20

Short-Term Rental Preemption – H.E.A. 1035, 120th Gen. Ass. Sess. (Ind. 2018)

Rent Regulation Preemption – Ind. Code. Ann. § 32-31-1-20 (2017)

Iowa

Rent Regulation Preemption –

Source-of-Income Nondiscrimination Preemption – Iowa Code Ann. §§ 331.304(13), 364.3(13)

Short-Term Rental Preemption – Iowa Code Ann. §§ 331.304(17), 364.3(13)

Kansas:

Inclusionary Zoning Preemption Kan. Stat. Ann. § 12-16,120

Kentucky:

Rent Regulation Preemption – Ky. Rev. Stat. Ann § 65.872 (1992)

Louisiana:

Rent Regulation Preemption – La. Stat. Ann. § 9.3258 (1977)

Massachusetts:

Rent Regulation Preemption – Mass. Gen. Laws ch. 40P, § 4 (1989)

Michigan:

Rent Regulation Preemption – Mich. Comp. Laws. § 123.411 (1988)

Minnesota:

Rent Regulation Preemption – Minn. Stat. § 477.9996 (2017)

Mississippi:

Rent Regulation Preemption – Miss. Code Ann. § 21-17-5 (2)(h) (2013)

Missouri:

Rent Regulation Preemption – Mo. Rev. Stat. 441.043

New Hampshire:

Short-Term Rental Preemption – N.H. Rev. Stat. Ann. § 48-A-2

New Mexico:

Rent Regulation Preemption – N.M. Stat. Ann. § 47-8A-1

North Carolina:

Rent Regulation Preemption – N.C. Gen. Stat. § 42-14.1

Short-Term Rental Preemption – N.C. Gen. Stat. Ann. Ch. 42A

North Dakota:

Rent Regulation Preemption – N.D. Cent. Code § 47-16-02.1

Oklahoma:

Rent Regulation Preemption – Okla. Stat. Ann. Tit. 11., § 11-14-101.1

Oregon:

Rent Regulation Preemption – Or. Rev. Stat. § 91.225

South Carolina:

Rent Regulation Preemption – S.C. Code Ann. § 27-39-60

South Dakota:

Rent Regulation Preemption – S.D. Codified Laws § 6-1-13

Tennessee:

Inclusionary Zoning Preemption – Tenn. Code. Ann. § 66-35-102

Short-Term Rental Preemption – Tenn. Code. Ann. § 13-7-603

Rent Regulation Preemption – Tenn. Code. Ann. § 66-35-102

Texas:

Source-of-Income Nondiscrimination Preemption – Ind. Code 36-1-3-8.5

Inclusionary Zoning Preemption – Tex. Loc. Gov’t Code § 214.905

Rent Regulation Preemption – Tex. Loc. Gov’t Code § 214.902

Utah:

Short-Term Rental Preemption – Utah Code Ann. § 10-8-85.4 (2017)

Rent Regulation Preemption – Utah Code Ann. § 57-20-1

VIRGINIA:

Inclusionary Zoning Preemption – 214 Va. 235, 198 S.E.2d 600 (1973) – “The Virginia Supreme Court has invalidated a mandatory inclusionary housing ordinance.” Bd. of Supervisors v. De Groff Enters., Inc.

Washington:

Rent Regulation Preemption – RCW 35.21.830

Wisconsin:

Inclusionary Zoning Preemption – Wis. Stat. § 66.1015

Short-Term Rental Preemption – Wis. Stat. § 66.1014

Rent Regulation Preemption – Wis. Stat. § 66.1015